CHAPTER IN A NUTSHELL

Business Law Principles and Practices 9e Arnold Goldman William Sigismond (Solutions Manual All Chapter)

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1 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

CHAPTER 1

Foundations of Law and the Role of Ethics in Business

CHAPTER IN A NUTSHELL

This first chapter and the remainder of the chapters in Part 1 of the text set the stage for the study of business law. Point out to your students that they will discover the law is all pervasive and affects nearly every facet of society. Part 1 should sharpen their interest in the study of law once they discover its relevancy in their daily lives. One responsibility as an instructor is to engender a feeling that the rule of law is the highest authority in the land and that no person is above it in spite of the shortcomings of our legal system and the way it operates.This first chapter defines law, its functions, its development, and its sources, and it distinguishes civil from criminal law. The remainder of the chapter focuses on the impact of unethical behavior in the workplace along with the challenges faced by business owners and managers in the ordinary course of their work. One important point made in the ethics section of the chapter is that ethics in the workplace is a compelling force and that a company that maintains strong ethical practices will face positive grow.

TEACHING POINTS

• First define law, or better yet, ask your students for their definition. You will get broad definitions as

well as those narrow in scope. One of my student’s definitions of law was: “A cop telling me I couldn’t park there.” Once you and your class reach an acceptable definition, then talk about it. Here

are some possibilities:

• What promises does the law make?
• How does law protect you and what are its limits?
• How does law evolve?
• Do we have too much law?
• Do we always turn to law to settle disputes?
• Define society. (A group of people, large or small, the students in your classroom, people living in

your state, or the people living in the United States.) Have students consider the following questions:

• Of what importance is law in our daily lives?

(It keeps people from doing what they want to do; people by nature have a tendency to do as they please, which of course may lead to serious conflict.)

• What would be some of the consequences of having a society in which there were no laws? 2 / 3

2 Chapter 1: Foundations of Law and the Role of Ethics in Business

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.(There would be chaos. Without laws, our society would be plagued with traffic problems, people stealing from one another, senseless killings, neighbors destroying other neighbors’ property, and in general, people abusing the rights of others to satisfy their own needs.)

• Why do people obey laws?

(Some people, for example, often obey the law simply to avoid unpleasant consequences.)

• Can we better handle ourselves in a society if we have knowledge of law?

(A major reason for taking a law course is to have people become more sensitized to those legal problems that exist in society and, if they affect them directly, to seek professional legal advice.)

• Students should be aware that law is complex and that there are no simple solutions to legal

problems. However, you should also point out that law seeks justice for all members of society by providing remedies for those individuals harmed, such as requiring the wrongdoer to pay money damages or to spend time in prison, or in some cases, both.

• Indicate that law is constantly changing. Consider these changes in your discussion: interplay

amongst the three branches of government: dismantling the separation of juvenile and adult offenders, increased emphasis on individual rights, that companies have the responsibility to look beyond making a profit and as their primary motive, but to also consider employee well being, reducing pollution, investing in the community and responding to concerns about their core product, responding to safety measures law in this age of terrorism (USA Patriot Act), greater protection for individuals accused of crimes, and environmental protection.

• Law should not be thought of in a narrow sense—that is, how it affects one person only. Discuss law

in a broad sense by emphasizing the positive effects it has on individuals and on society as a whole.To bring this point out, you may wish to discuss the legitimate functions of a legal system.

• Discuss the concept of stare decisis—when courts follow previous decisions to decide similar cases.

Stare decisis is still a very important concept within our legal system. In fact, the first question asked when a point of law is in dispute is: Is there a precedent case? Note, that U.S. Supreme Court cases are valid as precedent cases regardless of the age of the cases until overruled by the court itself, by a constitutional amendment, or by Congress.

• Attorneys researching a point of law will look to precedent cases as much as they look to statutes.

Precedent cases are created either when a court has to make a decision on a point for which no statute exists as a guide or when a court has to interpret a statute. Researching cases, however, has created difficulties because of the large volume of cases. The internet now aids in locating cases and in determining the status of cases as legal precedents (e.g., findlaw.com). It is interesting to note that the Internet has caused courts to expand the term precedent to include (in some cases) unpublished opinions.

• Be sure to point out that statutes take precedence over court decisions. Also point out that the U.S.

legal system is based upon the English common law. Discuss the significance of Robinson v.California found in the text. Note that one of the most important sources of business law today are administrative regulations, since a great deal of the regulation of individuals and business in this country is done by administrative agencies at the federal, state, and local levels.

• During a discussion of the section on “Civil Law Versus Criminal Law,” you may wish to point out

that the same wrongful act may be both civil and criminal. (Give an example.) Also, point out that a criminal action does not prevent a civil law suit and vice versa. As the chapter information on this topic points out, a criminal case and a civil case are based on two different theories of action (note the comparison in Table 1.1 in the text). The O.J. Simpson case is a good example. O.J. was tried for the crime of murder of his ex-wife Nicole Brown and her friend in the State of California. The jury

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